personal property is situate or employed, and the mortgage so recorded shall be held to be a good and substantial lien, from the date of the record of the same in each county where it is recorded, as well upon the personal as the real property of the company. [51 v. 332, 22; S. & C. 322.]

See 3309a.

SEC. 3290. [How directors may dispose of securities.] The directors of the company may sell, negotiate, mortgage, or pledge such bonds or notes, as well as any notes, bonds, scrip, or certificates for the payment of money or property which the company may have theretofore received, or shall hereafter receive, as donations, or in payment of subscriptions to the capital stock, or for other dues of the company, at such times and in such places, either within or without the state, and at such rates and for such prices at not less than seventy-five cents on the dollar, as in the opinion of the directors will best advance the interests of the company; and if such notes or bonds are thus sold at a discount, without fraud, the sale shall be as valid in every respect, and the securities as binding for the respective amounts thereof, as if they were sold at their par value. [51 v. 286, § 1; 73 v. 25, 2 5; S. & C. 321.]

SEC. 3291. [Directors may open transfer books in other states.] The directors of any company, when they deem it expedient for the interest or convenience of the company, may open transfer books in any of the states of the United States, for the purpose of transferring stock which may be purchased or held by persons out of this state; and they may employ suitable agents to keep such transfer books, whose acts, done under the authority of this section, shall be binding on the company. [48 v. 51, 2 1; S. & C. 321.]

SEC. 3292. [When directors may elect a vice-president.] The directors may elect from their number a vice-president whenever, in their opinion, the interests or convenience of the company requires it; and in case of the absence, death, resignation, or other disability of the president, the vice-president so elected shall exercise the same powers and discharge the same duties as properly and legally belong to the office of president, until such vacancy is filled by a new election, or such disability removed. [53 v. 36, 21; S. & C. 323.]

SEC. 3293. [When directors may elect a treasurer.] The directors may, whenever, in their opinion, the interests or convenience of the company will be promoted thereby, elect any suitable person as treasurer of the company, to be subject to such rules and regulations as they or the company may prescribe. [54 v. 103, § 1; S. & C. 324.]

SEC. 3294. [Number of directors may be increased or diminished.] A company may, by a vote of a majority of its stock at any regular annual meeting of the company, increase the number of directors to any number not greater than fifteen, or decrease the number before or after such increase to any number not below seven. [72 v. 17, ¿ 3.]

SEC. 3295. [Directors may be classified at stockholders' meeting.] The stockholders of a company, whether organized under general or special laws, whose railroad is wholly or partly within this state, may, at any regular meeting of its stockholders, or a special meeting of which at least thirty days' notice has been given by publication, by an affirmative vote of the stockholders owning a majority of the stock of the company, direct its board of directors to so classify the members thereof, by lot or otherwise, that one-third thereof shall terminate their official term at the first annual election thereafter, one-third at the next annual election thereafter, and the remainder at the next succeeding annual election thereafter; at the first regular election succeeding such classification, when the term of the directors of the first class expires, and at each succeeding annual election thereafter, the stockholders shall elect directors for three years, to take the place of those retiring, and no more; and all vacancies which otherwise occur in the board shall be filled in the manner prescribed by law. [66 v. 77, 2 1.]

SEC. 3296. [May be classified at annual elections.] The stockholders of a company whose road is wholly or partly within this state, may, at any regular annual election of directors thereof, so classify and elect such directors that one-third thereof shall

serve for one year, one-third for two years, and the remainder for three years; at each succeeding annual election thereafter the stockholders shall elect directors to take the place of those whose terms so expire; no person shall be allowed to vote for directors as aforesaid unless he has been a registered stockholder of such company at least thirty days prior to such election; and the registry of such stock shall be made in the books kept at the principal office of the company. [66. v. 77, 22.]

SEC. 3297. [Further application of two preceding sections.] The provisions of the two preceding sections shall also apply to companies whose bondholders or other creditors share with the stockholders in the election of directors; and in such case the vote necessary to direct the classification provided for in said sections shall be the same as is required to elect directors of such company. [66 v. 77, 2 3.]

SEC. 3298. [Subscriptions payable on completion of the road authorized. The directors of a company which has expended in the construction of its road ten per centum of its authorized capital, and has obtained actual bona fide subscriptions to its capital stock to the amount of at least twenty per centum thereof, may receive subscriptions to its capital stock, payable in such installments, dependent upon the completion of the whole or any part of its road so that cars may pass over the same, as its directors may deem expedient, and upon full payment thereof may issue certificates of stock therefor; but no subscriber to the stock hereby authorized shall be entitled to any of the privileges of a stockholder until his subscription is fully paid, nor shall he, for any purpose, be deemed a stockholder until the happening of the contingency upon which the installments on his subscription are made dependent. [54 v. 133, 23; S. & C. 325.]

An offer in writing to subscribe to the capital stock of a railroad company, conditioned upon the construction of its line of road along a designated route, is revocable, at the option of the party making such offer, at any time before its delivery to and acceptance by such company; and his death, before such delivery and acceptance, works such revocation: Wallace v. Townsend, 43 O. S. 538. Cited in Railroad Co. v. Hinsdale, 45 O. 8. 573. See note to same case under 3300.

SEC. 3299. [Certain property of certain companies exempt from execution.] A company which has begun and partly built its road, but is unable to finish and operate the same for want of means, may take subscriptions conditioned that the proceeds thereof shall not be used or applied upon the debts of the company; and all money or material collected upon such subscriptions, and all material or implements purchased with such money for the construction of the track, houses, depots and rolling stock of the company, shall be exempt from execution, or other process or proceedings for the payment of the debts of the company so long as such money, material or implements are used or designed for the construction of such track, houses, depots and rolling stock. [64 v. 192, 2 1; S. & S. 120.]

SEO. 3300. [When a railroad company may aid, lease, or purchase another; effect of such purchase.] Any company may aid another in the construction of its road, by means of subscription to the capital stock of such company, or otherwise, for the purpose of forming a connection of the roads of the companies, when the road of the company so aided does not and will not, when constructed, form a competing line; any company may lease or purchase any part or all of a railroad constructed, or in course of construction by another company, if the lines of road of such companies are continuous or connected, and not competing, upon such terms as may be agreed upon between the companies; and after such purchase the purchasing company shall be vested of all the rights and powers in respect to the location, construction, completion and operation of such railroad, and of branches thereto of the company from which it purchased said railroad, including the power to acquire and appropriate property therefor, and shall be subject to all the duties, obligations and restrictions of said company; and any two or more companies whose lines are connected and not competing, may enter into any arrangement for their common benefit consistent with, and calculated to promote the objects for which they were created. [1882, March 14: 79 v. 35; Rev. Stat. 1880; 70 v. 129, 24; S. & C. 281.]

See act, in 80 v. 111, referred to at head of this chapter.

Whether a railroad company, leasing another road, acquires its franchise to demand fares from the lessor company or directly from the state: C. H. & D. R. R. Co. v. Cole, 29 O. S. 126, 133.

Where a corporation, in pursuance of an act of the legislature, transfers or conveys its franchise to be a corporation to others, the transaction, in legal effect, is a surrender or abandonment of its charter by the corporation, and a grant by the legislature of a similar charter to the transferees or purchasers; and the charter so granted is subject to all the provisions of the constitution existing at the time it is so granted: State v. Sherman, 22 O. S. 412.

Where the railroad of one company is purchased by another railroad company, in pursuance of a statute authorizing the purchase: in the absence of any provision of law to the contrary, the road passes to the purchasing company, subject to the same restrictions and limitations as to rates chargeable for transportation as attached to it in the hands of the vendor: Campbell v. Railroad Co., 28 O. S. 168.

Express provision, however, prohibiting one company from leasing to another where their lines were competing, was made by the act of 1873 (4 Sayler 2950), and that provision was carried into the Revised Statues, 3300: State v. Vanderbilt, 37 O. S. 644.

Sale of road does not transfer conditional stock subscriptions. See note to 3409: Railroad Co. v. Hinsdale, 45 O. 8. 556.

SEC. 3301. [Two-thirds of the stockholders of each company must assent to lease or purchase of railroad.] No such aid shall be furnished, nor any purchase or lease perfected, until a meeting of the stockholders of each of the companies has been called for that purpose by the directors thereof, on thirty days' notice to each stockholder, at such place and in such manner as is provided for the annual meetings of the companies, and the holders of at least two-thirds of the stock of each company, in person or by proxy, at such meeting, assent thereto; and in case of the lease of any railroad situate in whole or in part within this state, the rental reserved and secured for the leased road shall be equal, at least, to the net earnings of the same for the fiscal year next preceding the one in which the lease is made. [1882, April 17: 79 v. 111; Rev. Stat. 1880; 70 v. 129, ? 24, ? 1.]

SEC. 3302. [How a dissenting stockholder may sell his stock.] A stockholder who refuses his assent to such sale, lease, or aid by subscription, and signifies the same by notice, in writing, to the purchaser or lessee, within sixty days thereafter, shall be entitled to demand and receive from such purchaser or lessee, previous to the consummation of such sale or lease, the average market value of his stock for six months next preceding the day of the meeting of the companies at which the sale or lease is approved, on the surrender of his stock; and if the stockholder and the purchaser or lessee can not agree as to the value of the stock, the parties may submit the question to arbitration, which shall be conducted in accordance with the provisions of law regulating arbitrations, so far as the same may be applicable, by three disinterested persons, to be appointed upon the motion of either of the parties, by the judge of the court of common pleas of the county in which the owner of the stock resides, or, in case he is a non-resident of the state, or of any county through or into which the road passes, then in the county in which the principal office of the company is kept. [70 v. 129, § 24, § 2.] SEC. 3303. [When the court may appoint arbitrators.] If any such stockholder refuse to submit the question to arbitration, the proper judge shall, upon the application of a director of either of the companies parties to the contract, appoint the arbitrators, who shall proceed to ascertain the value of the stock in the same manner as if the question had been submitted by consent of both parties; and if the party owning the stock refuse to receive the amount awarded in any case, the company may deposit the same with the clerk of the court of common pleas of the county in which the arbitration is held, which deposit shall operate the same as if payment were made to the owner of the stock. [70 v. 129, § 24, ? 2 ]

SEC. 3304. [Notice of application therefor: how given.] In all cases of arbitration under the two preceding sections, the party desiring such arbitration shall give the opposite party at least ten days' notice of his intention to apply to the judge for the appointment of arbitrators, which notice shall be served in the same manner as is provided for the service of a summons, and shall specify the time and place of the hearing

of the application; but in cases of non-residents the notice shall be by publication for four consecutive weeks, in some newspaper printed in the county. [70 v. 129, 24, 3.]

SEC. 3305. [Lease of railroad; security required; void if rental not paid; lessor and lessee jointly liable.] No company shall lease its road, or any part thereof, to any other company, whether of this or any other state, as herein before provided, unless the lessor receive full and adequate security for the payment of the rental and for the preservation of the property of the lessor, in as good condition as on entering into possession, and if the lessee fail to pay such rental promptly when due, such lease shall be void, at the option of the lessor; and the company to whom any railroad is leased, if a corporation of any other state, shall be subject to all the restrictions, disabilities and duties of a railroad company incorporated within this state; and notwithstanding such lease the corporation of this state lessor therein, shall remain liable as if it operated the road itself, and both the lessor and lessee shall be jointly liable upon all rights of action accruing to any person for any negligence or default growing out of the operation and maintenance of such railroad, or in any wise connected therewith, and may be jointly sued in any of the courts of this state of proper jurisdiction, and prosecuted to final judgment therein as in other cases of joint liability; and provided that service may be had upon said companies, or either of them, by the service of process upon any officer or agent of either of said companies. [1883, April 13: 80 v. 116; Rev. Stat. 1880; 70 v. 129, 24, 24.]

SEC. 3306. [How an extension of a line authorized.] When a company desires to extend the line of its road beyond either of its previously designated termini, the president and directors of the company may submit the question of such extension and change of termini to a meeting of its stockholders, to be called for that purpose, by notice published for four consecutive weeks in some newspaper in general circulation in each county through or into which it passes; and if the holders of the majority of the stock, in person or by proxy, so determine, the president and directors, or a majority of them, shall make a certificate of the fact, naming the places of the new terminus or termini of the road, and the county or counties through or into which the extended line will pass, and file it in the office of the secretary of state, and such certificate and extension shall be considered and held to be a part of the original line of the road. [72 v. 70, ? 2.]

SEC. 3307. [For what purposes capital stock may be increased.] A company may increase its capital stock, as hereinafter provided, whenever, in the opinion of the directors, the same is insufficient for the construction of its road, or it becomes necessary for the speedy and convenient transaction of its business to construct a second additional track, extend its line or construct branches thereof, increase its machinery, rolling-stock, depots, or other fixtures, or for the purpose of paying any bonds issued or guaranteed by it, or for the purchase of any railroad within this state which has been or may hereafter be sold by a judicial order or decree, or for completing its line of road, or liquidating or paying off any unfunded or floating debt, or other liabilities incurred in the construction or equipment of its road, or for the purpose of extending the same or constructing branches as authorized, or for either or all the purposes aforesaid. [70 v. 289, 21; 72 v. 91, 21; S. & C. 325.]

A railroad having $1,500,000 stock, with power to increase by its charter, and with power to allow and pay interest on its stock, issued its bonds bearing interest and containing clause that bonds might in a certain time be converted into stock at option of holder: Held, that bondholders who had been regularly paid interest could not participate in the extra issue of stock made at the time of conversion: Sutliff v. C. & M. R. R., 24 O. S. 147.

SEC. 3308. [Proceedings to increase stock.] Before any stock shall be issued under the last section a majority of the directors shall call a meeting of the stockholders, designating distinctly the time, place and purpose of the meeting, and the amount of stock required, which meeting shall be held at the principal business office of the company in this state, and notice of which shall be given for at least thirty days previous, by continued publication in at least two newspapers published and of general circulation

in the state, and by a like notice, mailed thirty days previous to the time named for the meeting, to each stockholder whose residence is known; and if at such meeting the consent of the holders of a majority of the stock upon which they would be entitled to vote at an election of directors of the company be given, the stock of the company may be increased to such amount as may be decided necessary or requisite for the purposes named in the preceding section. [73 v. 25, ? 2.]

SEC. 3309. ["Common" or "preferred" stock may be issued; sale thereof.] The increased stock may be "common" or "preferred," as shall be designated in the call for the meeting of the stockholders; if preferred stock be issued, the company may guarantee to the holders thereof semi-annual or quarterly dividends, to an amount not exceeding six per centum per annum, payable at its office, or at such other place as the directors may designate; the stock may be sold at such time and place, either within or without the state, as may be deemed advisable and the proceeds thereof applied to the purposes for which it is issued; the unpreferred stock of the company shall be entitled to dividends only out of the surplus of the profits, after setting apart a sum sufficient to pay the dividends upon the preferred stock, and the company which issues such preferred stock shall reserve the privilege of redeeming and canceling the same at par, at any time after three years from the date of its issue; and the preferred stock herein provided for may be convertible into bonds of the company at the option of the parties. [70 v. 289, 3.]

SEC. 3309a. [Railroad companies may borrow money and issue securities in lieu of preferred stock; how proceeds to be applied.] Any railroad company now or hereafter organized under the laws of this state, and any such company which now is or shall hereafter be consolidated with other companies, as provided in sections thirty-three hundred and seventy-nine, thirty-three hundred and eighty, thirty-three hundred and eighty-one, and thirty-three hundred and eighty-two of the revised statutes, may, at a meeting of its stockholders, called as provided in section thirty-three hundred and eight, in lieu of issuing preferred stock as provided in section thirty-three hundred and nine, provide for borrowing money to locate, construct and equip its proposed line of railway, or for the purpose of leasing or purchasing and equipping branch or connecting roads constructed or in process of construction, not exceeding ten miles in length, or for redeeming or exchanging any part or all of its previously issued bonds, or for funding its floating debt, or for any or all of said purposes, in such an amount as it may deem necessary, not exceeding its authorized capital stock, and at such rates of interest as may be agreed upon between the respective parties, not exceeding seven per cent. per annum, payable semi-annually or quarterly, as they may direct, and may execute and issue securities therefor, and to secure the payment thereof, may pledge the entire property and net income of such company by mortgage or otherwise. And any railroad company formed by the consolidation of a railroad company or companies, created by or existing under the laws of this state and any other state or states, with a railroad company or companies of this state or any other state, may, from time to time, if authorized by the vote in person or proxy of holders of two-thirds (3) of the full paid-up stock of such consolidated railroad company present and voting at meetings of stockholders, called as aforesaid, issue its bonds, convertible or otherwise, into stock, bearing a rate of interest not exceeding six per centum per annum, for one or more of the following purposes: Paying, redeeming or funding debts, or obligations assumed, incurred or created by it or either of its predecessors or constituent companies, compromising claims made against it, or either of its predecessors, or constituent companies, purchasing the whole or any part of any railroad held by it under lease to, or operating contract with it or either of its predecessors or constituent companies, acquiring the whole or any part of the stock or bonds of any railroad company owning a railroad held by such consolidated railroad company under lease or operating contract, acquiring the whole or any part of the bonds, notes, or other obligations of any other railroad company of this or any other state, the whole or a majority of whose capital stock shall be held by such consolidated railroad company, completing, extending, improving, maintaining, or operating its road, branches or lines, held under lease